Ethical Decision-Making: Personal

and Professional Contexts

 Objectives

1. Describe a process for ethically

responsible decision-making
2. Apply this model to ethical decision
points.
3. Explain the reasons why “good” people
might engage in unethical behavior
4. Explore the impact of managerial roles
on the nature of our decision-making.
Business Decisions
The Nature of Ethical Decisions: Complex and
Difficult
1. Managers confront facts and values when
making decisions
2. Good and evil are not always clear-cut – ex:
genetic products
3. Knowledge of consequences are limited
The Nature of Ethical Decisions: Complex and
Difficult

4. Existence of multiple constituencies – conflicts

of interest
5. Multiple constituencies can also use ethical
arguments to justify their position
 Business Ethics as Ethical Decision-
Making
• Decisions which follow from a process of
thoughtful and conscientious reasoning will be
more responsible and ethical decisions.

• Responsible decision-making and deliberation

will result in more responsible behavior.
 Business Ethics as Ethical Decision-
Making

• The point of a business ethics course?

– To explore ethical behavior, to consider how
human beings properly should live their
lives.
 Personal Responsibility vs. Social
Responsibility?
• In this sense, business ethics is concerned:
1. How business institutions ought to be
structured;
2. Corporate social responsibility;
3. About making decisions that will impact
many people other than the individual
decision-maker.
 Personal Responsibility vs. Social
Responsibility?
• examine business institutions from a social rather
than an individual perspective.

• We refer to this broader social aspect of ethics as

decision-making for social responsibility.
 Legal Responsibilities vs.
Ethical Responsibilities
• The law provides a very important guide to
ethical decision-making;

• But legal norms and ethical norms are not

identical nor do they always agree.
 Legal Responsibilities vs.
Ethical Responsibilities

• Over the last decade, many corporations have

established ethics programs and hired ethics
officers who are charged with managing
corporate ethics programs.
 Legal Responsibilities vs.
Ethical Responsibilities

• Much good work gets done by ethics officers,

but it is fair to say that much of this focuses
on compliance issues. The Sarbanes-Oxley
Act created a dramatic and vast new layer of
legal compliance issues.
How Is Ethical Decision-Making Different From Other
Decision-Making?

• Ethics is a part of practical reason:

– reasoning about what we should do,

– as opposed to theoretical reason, which is
reasoning about what we should believe.
 How Is Ethical Decision-Making Different From
Other Decision-Making?

• Theoretical reason is the pursuit of truth, which is

the highest standard for what we should believe.
• According to this tradition, science is the great
arbiter of truth.
• Science provides the methods and procedures for
determining what is true.
 How Is Ethical Decision-Making Different From
Other Decision-Making?

• Thus, the scientific method can be thought of as

the answer to the fundamental questions of
theoretical reason:

• What should we believe?

Philosophical Ethics and Theories
• a comparable methodology or procedure for
deciding on what we should do and how we
should act.

• guidelines that can provide direction and

criteria for decisions that are more or less
reasonable and responsible
Philosophical Ethics and Theories
• These traditions, or what are often referred to
as ethical theories, explain and defend various
norms, standards, values, and principles that
contribute to responsible ethical decision-
making.

• Ethical theories are patterns of thinking, or

methodologies, to help us decide what to
do.
An Ethical Decision-Making Process:

1. Determine the facts

2. Identify the ethical issues involved
3. Identify stakeholders and consider the
situation from their point of view
4. Consider the available alternatives – also
called “moral imagination”
An Ethical Decision-Making Process:
5. Consider how a decision affects
stakeholders, comparing and weighing the
alternatives, based on:
– Consequences
– Duties, rights, principles
– Implications for personal integrity and
character
6. Make a decision
7. Monitor outcomes
 Determine the Facts

• understand the situation,

• distinguish facts from mere opinion
• Knowing the facts and carefully reviewing
the circumstances can go a long way to
resolving disagreements at an early stage.
 Determine the Facts

• social sciences can help us determine the

facts surrounding our decisions.
• How would this apply to the Opening Decision
Point (the I-Pod)?
Identify the Ethical Issues Involved
• recognize a decision or issue as an ethical
decisions or ethical issue.

• It is easy to be led astray by a failure to

recognize that there is an ethical component
to some decision.

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Identify the Ethical Issues Involved
• In many business situations, what appears to be
an ethical issue for one person will be judged as a
simple financial decision by others.
– How does one determine that an issue raises
an ethical issue at all?
– When does a business decision become an
ethical decision?

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 Identifying Ethical Issues
• “business” or “economic” decisions and ethical
decisions are not mutually exclusive.

• Being sensitive to ethical issues is an important

characteristic that needs to be cultivated in
ethically responsible people.

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 Identifying Ethical Issues
• We also need to ask how our decisions will
impact the well-being of the people involved.
– To the degree that a decision affects the well-
being—the happiness, health, dignity, integrity,
freedom, respect—of the people involved, it is
a decision with ethical implications.

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 Identifying Stakeholders

• "Stakeholders“ includes all of the groups and/or

individuals affected by a decision, policy or
operation of a firm or individual.

• Considering issues from a variety of perspectives

other than one’s own, and other than what local
conventions suggest, helps make one’s decisions
more reasonable and responsible.
 Identifying Stakeholders

• Thinking and reasoning from a narrow and

personal point of view = not have understood the
situation fully.

• likewise guarantees that we likely have made a

decision that does not give due consideration to
other persons and perspectives.
Consider the Available Alternatives

• Creativity in identifying options

• Also called “moral imagination”
• distinguishes good people who make ethically
responsible decisions from good people who do
not.
Consider the Available Alternatives

• the obvious options with regard to a particular

dilemma

• the much more subtle ones that might not be

evident at first blush.
 Compare and Weigh The
Alternatives
1. Create a mental spreadsheet:
2. Alternative = Effect on each stakeholder
3. Place oneself in the other person’s position.
4. Predict consequences
5. Think of ways to mitigate, minimize, or
compensate for any possible harmful
consequences or to increase and promote
beneficial consequences.
 Compare and Weigh the
Alternatives: Some options
• Some alternatives might concern matters of
principles, rights, or duties that override
consequences.

• Within business settings, individuals will often

have specific duties associated with their
position.
 Compare and Weigh the
Alternatives: Some options
• Are there duties associated with company
rules, professional codes of conduct, business
roles, or legal duties involved?

• Perhaps there is guidance available in specific

circumstances from these sources or others.
 Compare and Weigh the
Alternatives: Some options
• Alternatives = effects of decision on one’s own
integrity and character.

• Understand one’s own character and values

should play a role in decision-making.
Compare and Weigh the Alternatives:
Some options
 What type of person would make this decision?
 What kind of habits would I be developing by
deciding in one way rather than another?
 What type of corporate culture am I creating
and encouraging?
 How would I, or my family, describe a person
who decides in this way?
 Is this a decision that I am willing to defend in
public?”
 Making the Decision,
then Monitor it
• Accountable decision = reason to support the
decision.

• As a first step in making ethically responsible

decisions, one must be prepared to offer reasons
to support the decision.
 Making the Decision,
then Monitor it
• We have a responsibility to evaluate the
implications of our decisions.

• Monitor and then learn from the outcomes

• Change our actions accordingly when faced with

similar challenges in the future.

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Why do “Good” People engage
in “Bad” Acts?
• People sometimes choose to do something
unethical.

• Never underestimate the real possibility of

immoral choices and unethical behavior.

• Well-intentioned people fail to choose ethically.

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Why do “Good” People engage
in “Bad” Acts?
 This does not mean that these unethical
decisions or acts are excusable but that the
individuals who engage in the unethical
behavior may have done so for a variety of
reasons.

 As it turns out, there are many stumbling blocks

to responsible decision-making and behavior. . .
.

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Explaining “Bad” Acts?
 Cognitive / Intellectual
Stumbling Blocks
 A certain type of ignorance can account for bad
ethical choices

 We sometimes only consider limited

alternatives.

 We often consider only those two clear paths

 Sometimes, other alternatives might be

possible.
 Cognitive / Intellectual
Stumbling Blocks
 Simplified decision rules are most comfortable
with us.

 Having a simple rule to follow can be reassuring

to many decisions-makers.

 Using a simple decision rule might appear to

relieve us of accountability for the decision,
even if it may not be the best possible decision.

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 Explaining “Bad” Acts?
• “Satisficing”

• We also often select the alternative that satisfies

minimum decision criteria.

• We select the option that suffices, the one that

people can live with, even if it might not be the
best.

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 Explaining “Bad” Acts?
• Issues of motivation and willpower:

• As author John Grisham explained in his book,

Rainmaker, “Every (lawyer), at least once in every
case, feels himself crossing a line he doesn’t
really mean to cross. It just happens.”

• Sometimes it is simply easier to do the wrong

thing.

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 Ethical Decision-Making in Managerial
Roles
• Social circumstances = easy or difficult to make
own judgment.

• Organization’s context sometimes make it difficult

to act ethically.
•
• Responsibility for the circumstances falls on the
business management and executive team.
 Managerial Roles
• Personal integrity lies at the heart of such individual
decision-making:
– What kind of person am I?
– What are my values?
– What do I stand for?

• But every individual also fills a variety of social roles

and these roles carry with them a range of
expectations, responsibilities, and duties.
 Managerial Roles
• Some of our roles are social: friend,
son\daughter, spouse, citizen, neighbor.

• Some are institutional: manager, teacher,

student body president.
Roles & Responsibilities in Business
 Decision-making raises broader questions of
social responsibilities and social justice.
 Managers, executives, board members have the
ability to create and shape the organizational
context in which all employees make decisions.
 They therefore have a responsibility to promote
organizational arrangement that encourage
ethical behavior and discourage unethical
behavior.